Sale of Medina, 26 Seale Street, St. Helier.

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A decision made (MD-H-2008-0102) regarding: Sale of Medina, 26 Seale Street, St. Helier.

Decision Reference: MD-H-2008-0102
Decision Summary Title :	DS – Sale of Medina 26 Seale Street		Date of Decision Summary:	29th September 2008
Decision Summary Author:	Radley Montgomery Asset Manager		Decision Summary: Public or Exempt? (State clauses from Code of Practice booklet)	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:
Written Report Title :	Medina 26 Seale Street - Sale		Date of Written Report:	1st October 2008
Written Report Author:	Radley Montgomery Asset Manager		Written Report : Public or Exempt? (State clauses from Code of Practice booklet)	Public
Subject: To agree the sale of Medina, 26 Seale Street
Decision(s): The Minister decided, To revoke MD-H-2008-0087 To seek the approval of the Treasury and Resources Minister for the sale of Medina, 26 Seale Street on the open market in accordance with those other properties being sold under appendix C rather than in accordance with P6 2007 appendix D1 “Planned shared equity and outright sales to social housing tenants” To approve the sale of Medina 26 Seale Street for the sum of £380,000 to E T Developments Limited To request that the Treasury & Resources Minister similarly agree and seek the assistance of the Greffier and Attorney General in signing the necessary contracts. To direct that the resultant funds be credited to HYC029.120410
Reason(s) for Decision: To transfer Medina 26 Seale Street from appendix D to appendix C in accordance with P6-2007 to allow sale on the open market To ensure that the sale is carried out in accordance with Standing Order 168 and the States approval of P6.2007.
Resource Implications: Financial: £380,000 receipt as agreed on States approval of P6.2007 to be credited to HYC029.120410
Action required: Asset Manager to arrange for Treasury and Resources Minister approval and oversee the passing of the contracts and receipt of funds
Signature:		Position: Minister
Date Signed:		Date of Decision (If different from Date Signed):

Sale of Medina, 26 Seale Street, St. Helier.

DATE OF REPORT:- 29 th September 2008

REPORT TO THE HOUSING MINISTER

Medina 26 Seale Street St Helier- Sale

Purpose

To seek the approval from the Minister for Housing to request the Minister for Treasury and Resources to allow the Public to sell the above property on the open market rather than to an existing states rental tenant as currently required under P6/2007.

Background

On 17th July 2007 the States approved the Social Housing Property Plan 2007 – 2016. In doing so the States adopted the proposition, part (i) of which required that ‘… a number of non-core, prime location properties, as detailed in Appendix C of the Social Housing Property Plan 2007 – 2016, should be sold on the open market;’.

Further at part (ii) the States agreed that ‘the Housing Department should make arrangements to enable States rental tenants to apply to buy one of the properties listed in Appendix D of the Plan, according to the 10 year timetable specified, on a shared equity basis or at full value, and with first-time buyer conditions attached ……

Financial Implications

The property listed above requires expenditure in order to make the individual units fit for sale to States tenants; the Minister will recall that the Department undertook only to sell homes that meet the decent homes standard to tenants so as not to risk passing on large maintenance commitments to buyers. This is particularly important with flats where parts of the building structure might need to be owned in common or at least have legal processes and articles of association in place to take care of long term maintenance. A conservative estimate of necessary expenditure for this property might be as much as £75,000. It is still unlikely that existing States rental tenants who have expressed a desire to purchase will want to consider any of these units. If sold on the open market, the properties could be sold in their present condition avoiding the cost of unnecessary refurbishment.

This property has been valued both as potentially refurbished homes sold to States rental tenants and without any refurbishment for sale on the open market in present condition as follows:

ADDRESS

Value for

Shared Equity

Sale

Assuming Full

Refurbishment

And 100% paid

Sale on Open

Market

Assuming no

refurbishment

Cost of

Refurbishment

(estimated) to

meet Decent

Homes Standard

Difference

(benefits of open market sale)

Medina, Seale Street, St Helier

£430,000

£360,000

£75,000

£5,000

Preliminary advice from the Conveyancing Section of the Law Officers’ Department has indicated that the contract contains no restrictions which would create a barrier to open market sale.

Medina has been valued at £360,000 in accordance with the approved valuation policy MD-H-2007-0057. The valuation set is therefore valid until 12th November 2008.

On 23rd May 2008 (MD-H-2008-53) the Minister will recall that he agreed to place Medina on the open market for sale at offers in excess of the valuation.

On 1st September 2009 (MD-H-2008-0087) the Minister agreed to sell the property to Emma Jane Short and Thomas Muirhead jointly for the sum of £380,000. Miss Short and Mr Muirhead have since indicated that they wish to purchase the property in the name of E.T Developments Ltd. The price remains the same at £380,000 which is £20,000 over the valuation and will be a cash purchase, with no onward chain.

Conclusion

There is appears to be no benefit to the Public in the Housing Department incurring costs in refurbishing this property nor is it likely that any States tenant would be in a position to undertake the refurbishment. As such the most viable option is for its sale on the Open Market to allow the units in accommodation to be refurbished and brought back into use.

Recommendations

That the Minister,

Agree to revoke MD-H-2008-0087
Seek the approval of the Treasury and Resources Minister for the sale of Medina, 26 Seale Street on the open market in accordance with those other properties being sold under appendix C rather than in accordance with P6 2007 appendix D1 “Planned shared equity and outright sales to social housing tenants”
Approve the sale of Medina 26 Seale Street for the sum of £380,000 to E.T Developments Ltd
Request that the Treasury & Resources Minister similarly agree and seek the assistance of the Greffier and Attorney General in signing the necessary contracts.
Direct that the resultant funds be credited to HYC029.120410

Report Drafted By: ______________________________ Date

Asset Manager

Report Approved By: _____________________________ Date

Director of Estate Services